Chinese Currency Accountability Act of 2023

Floor Speech

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Mrs. KIM of California. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 510) to require the United States Governor of, and the United States Executive Director at, the International Monetary Fund to oppose an increase in the weight of the Chinese renminbi in the Special Drawing Rights basket of the Fund, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 510

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Chinese Currency Accountability Act of 2023''. SEC. 2. OPPOSITION OF THE UNITED STATES TO AN INCREASE IN THE WEIGHT OF THE CHINESE RENMINBI IN THE SPECIAL DRAWING RIGHTS BASKET OF THE INTERNATIONAL MONETARY FUND.

The Secretary of the Treasury shall instruct the United States Governor of, and the United States Executive Director at, the International Monetary Fund to use the voice and vote of the United States to oppose any increase in the weight of the Chinese renminbi in the basket of currencies used to determine the value of Special Drawing Rights, unless the Secretary of the Treasury has submitted to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report which includes a certification that--

(1) the People's Republic of China is in compliance with all its obligations under Article VIII of the Articles of Agreement of the Fund;

(2) in the preceding 12 months, there has not been a report submitted under section 3005 of the Omnibus Trade and Competitiveness Act of 1988 or section 701 of the Trade Facilitation and Trade Enforcement Act of 2015 in which the People's Republic of China has been found to have manipulated its currency; and

(3) the People's Republic of China adheres to the rules and principles of the Paris Club and the OECD Arrangement on Officially Supported Export Credits. SEC. 3. SUNSET.

Section 2 shall have no force or effect beginning 10 years after the date of the enactment of this Act.

Mr. Speaker, today, I rise in support of the Chinese Currency Accountability Act sponsored by the gentleman from Ohio (Mr. Davidson).

In 2016, the International Monetary Fund included the Chinese renminbi, RMB, in the currency basket that determines the value and interest rate for Special Drawing Rights, known as SDRs. SDRs are both reserve assets and an accounting unit for the IMF, so they play a central role in the Fund's lending throughout the world.

It was premature for the Fund to let the RMB influence the SDR, whose value had previously been determined only by the dollar, euro, yen, and pound.

The PRC has failed to make the serious reforms that would justify labeling the RMB a major currency. In addition, the People's Bank of China was and remains a tool of the Chinese Communist Party, not an independent central bank.

The Treasury Department knows this all too well. Every year, it reports to Congress that China's currency management is so opaque that it is difficult for the outside world to even understand Beijing's policy toward the RMB.

In addition, Beijing's lending policies abroad, including through the Belt and Road Initiative, have saddled developing countries with so much debt that the IMF faces difficulties designing rescue programs.

It is difficult to know how much debt these countries are in. The CCP refuses to play by the multilateral rules of the road to not only be transparent about the debt but to significantly restructure it. This has become one of the most acute threats to the mission of the Fund.

Nevertheless, in 2022, Treasury signed off when the IMF voted to increase the weight of the RMB in the SDR currency basket. As a result of this shocking decision, the RMB has now become the third most important currency in the basket, behind the dollar and euro.

This is why Mr. Davidson's bill is critical. H.R. 510 will prevent future increases to the RMB's weight at the IMF until China starts playing by the rules.

This is a commonsense measure that was unanimously supported when the Financial Services Committee marked it up last year.

I commend Mr. Davidson for his clear-eyed piece of legislation to hold Beijing accountable, and I urge my colleagues to support it.
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Mrs. KIM of California. Mr. Speaker, I urge my colleagues to support H.R. 510, and I yield back the balance of my time.

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